Why does Qantas outsource pilots and engineers?

Expert Answers

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First of all, it is not correct to say that Qantas is already outsourcing pilot jobs, at least.  The dispute is about whether it should be banned from doing so in the future.

Turning to the main point of your question, outsourcing is done because it can typically lead to reduced costs.  Large old airlines like Qantas and like many American airlines have very high labor costs that are due in large part to union contracts that date back to a time when the air industry was much less competitive.  Today, there are tremendous pressures on airlines to be more competitive.  The attempt to outsource jobs is one way that an airline like Qantas can react.

By outsourcing jobs, Qantas can hope to get an acceptable quality of work without having to pay as much.  It can use pilots and engineers who are not covered by Qantas union contracts and therefore do not have to be paid as much in wages and benefits.  Qantas hopes such actions will make it more competitive and profitable going forward.

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